Crude Oil
Oil prices jumped more than 2 percent on Monday to a near six-month high after the United States announced a further clampdown on Iranian oil exports. Brent crude futures rose $ 2.07 cents to settle at $74.04 a barrel. WTI futures rose $ 1.70 to settle at $ 65.70 a barrel.
Washington said it will eliminate in May all waivers allowing eight economies to buy Iranian oil without facing U.S. sanctions. U.S. Secretary of State Mike Pompeo reiterated that Washington’s goal was to bring down exports of Iranian oil to zero and said there were no plans for a grace period beyond May 1. U.S. officials are seeking ways to prevent Iran from circumventing oil sanctions. Iran said the decision not to renew the waivers has “no value” but Tehran was in touch with European partners and neighbors and would “act accordingly,” Iranian news agencies reported, citing the Foreign Ministry.
India hopes Washington will allow allies to keep buying some Iranian oil instead of halting the purchases altogether from May. Trump said Saudi Arabia and other OPEC nations could “more than make up” for any drop in Iranian oil supplies. Saudi Arabia said it would coordinate with other producers to ensure an adequate crude supply and a balanced market.
Naphtha
Asia’s naphtha crack hit a three-week high of $53.60 a tonne on Monday as buyers begin to replenish the fuel for June delivery. But the current level was 2.2 percent lower than a month ago, indicating more supplies.
South Korea’s Hanwha Total was among the first to issue a tender to buy naphtha for first-half June delivery, paying premiums of $5 to $6 a tonne to Japan quotes on a cost-and-freight (C&F) basis. Hanwha Total had on April 8 paid about $5 a tonne premium for the same grade of heavy full-range grade naphtha scheduled for second-half May arrival at Daesan, down from over $8 a tonne premium it had forked out on March 28.
The May crack is higher at – $ 5.60 /bbl
Gasoline
No fresh news on gasoline markets.
The May crack is lower at $ 7.90 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil widened their discounts to 26 cents a barrel to Singapore quotes on Monday, compared with a 21-cent discount on Thursday.
The May/June time spread for 10ppm gasoil widened its contango structure to be at a discount of 43 cents a barrel on Monday, as against 39 cents on Thursday.
Cash discounts for jet fuel were at 25 cents a barrel to Singapore quotes, compared with a discount of 13 cents per barrel in the previous session.
The May crack for 500 ppm Gasoil is lower at $ 12.10 /bbl with the 10 ppm crack at 12.75 / bbl. The regrade is higher at $ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash discounts for mainstay 380-cst high-sulphur fuel oil widened on Monday as the market grappled with weak buying interest, while the front-month spread narrowed its backwardated structure.
Cash discounts for 380-cst high-sulphur fuel oil (HSFO) were at $1.72 a tonne to Singapore quotes, compared with a discount of $1.02 a tonne on Thursday.
The 380-cst May/June time-spread was trading at about 25 cents per tonne on Monday, down from 50 cents a tonne on Thursday.
Refining margins for the more actively traded 380-cst barge crack to Brent crude for May inched up to minus $7.70 a barrel during Asian trading hours. The cracks were minus $7.72 a barrel on Thursday, levels not seen since December.
The May 180 cst crack has improved slightly to – $ 2.90 / bbl with the visco spread at $ 1.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report for today.
Hedge recommendations are essentially made for refiners. These are not trading positions as such. The rationale of these positions is to lock in extraordinary levels for the refiner.
Click Here to see how all our recommendations have fared
About this blog
This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.